17-05-2025
Why regulating ‘finfluencer' content isn't going to save us from making bad money moves
For most of us, trying to figure out how to best manage our money can be overwhelming. Just like how most of us learnt how to spend and save our primary school allowance from our parents, we seek out people who have already done it before us as a guide.
We watch videos, browse forums and devour blogs, hoping to learn from others' experiences (and, hopefully, avoid their mistakes).
It's no wonder that 'finfluencers' – online creators specialising in content about financial literacy and breaking down complex financial concepts for the layman to understand – have become so popular in recent years.
In an October 2024 survey by MoneySmart, over half of Singaporeans aged 18 and above said they relied on platforms like YouTube, Instagram, Facebook, and TikTok for financial advice, preferring them over traditional sources such as family, friends, and financial advisers.
The internet has made financial advice more accessible than ever. We cannot ignore the benefits of such resources, especially if we were never taught these things in school or at home.
But just as we're encouraged to consult doctors rather than relying solely on health advice found on the internet, no one should be relying on financial advice online for their own financial decisions.
THE CHOCOLATE FINANCE WAKE-UP CALL
In March, Chocolate Finance customers experienced a temporary liquidity delay following mass withdrawals caused by online panic.
The financial services company had marketed themselves as a more attractive high-yield alternative to put one's cash in, boasting returns as high as 3-5 per cent per annum through a managed investment portfolio. It gained popularity quickly, receiving favourable reviews on social media platforms and Internet forums.
However, when a few YouTube videos about several prominent finfluencers withdrawing their Chocolate Finance funds went viral, it led customers to worry if the platform was truly safe, resulting in massive withdrawals within a day or so. The company could no longer afford to continue supporting instant withdrawals, leading to further panic when many users found themselves told to wait a few days before their funds would land in their bank accounts.
None of the public's initial fears about the platform materialised – all customers who requested withdrawals during the height of the meltdown, between Mar 10 and Mar 18, got their money back within a week or two. However, the incident raised questions about how online sentiment could so quickly lead to a liquidity crunch in a regulated financial firm.
The Chocolate Finance saga highlighted a broader issue with personal finance today: That so many of us seem to have a tendency to make snap investment decisions based on little more than a short video or blog post.
NO SUCH THING AS ONE-SIZE-FITS-ALL FINANCIAL ADVICE
A fresh graduate saving for a wedding should not follow the same investment strategy as someone nearing retirement. A dual-income household with no kids will have different insurance needs from a single parent.
What works for one person might be unsuitable – or even harmful – for another. Yet, much of the financial content online presents examples, scenarios, or success stories without always highlighting these distinctions.
To be fair, we cannot realistically expect all content to do so sufficiently. Such advice, designed and packaged for online consumption, must be broad so as to appeal to the largest possible group of viewers or readers.
This doesn't invalidate such content, but it does call for critical thinking from us as consumers.
Short videos and posts can only convey so much, and even the most well-meaning advice may not apply to everyone's situation. 'Save 30 per cent of your salary' seems like sound advice, but for someone already struggling to make ends meet, this is hardly feasible.
This is not a flaw of online financial advice, but rather a reminder that all advice, whether found online or offline, must be interpreted through the lens of individual context. Just because someone posts a video on TikTok talking about how they grew their portfolio by investing in crypto doesn't mean you should blindly follow suit.
REGULATIONS ALONE CANNOT SAVE US
In response to the Chocolate Finance fallout, many have called for tighter regulations on finfluencers and financial content online.
There's good intent behind this. Financial advice should always be responsibly given, and content creators who promote products should be transparent – especially if there's a commercial relationship involved.
But regulation alone isn't the fix. Even before the advent of social media, licensed professionals have been known to cross ethical lines or mislead their clients.
A Great Eastern insurance agent was jailed last year after misappropriating over S$300,000 from his clients by forging insurance documents and redirecting funds. In 2018 and 2019, two former personal bankers with UOB separately received jail sentences for cheating their clients of hundreds of thousands of dollars.
Their victims weren't deceived by TikTok videos and Instagram carousels – they were misled by credentialed individuals wearing suits, working in bank branches and corporate offices.
Official qualifications and titles do not guarantee integrity either. Misalignment of incentives, pressure to meet sales targets, or personal misconduct can lead to poor advice – even in regulated environments.
The fact is that bad financial advice doesn't just live online. It can come from anywhere, even your well-meaning aunt at family gatherings.
The more empowering and sustainable approach is to understand that the only person who will always have your best financial interests at heart is yourself.
TAKING RESPONSIBILITY FOR OUR DECISIONS
Taking ownership of your finances means more than just watching YouTube videos or reading a few blog posts. We can't always blame someone else for our decisions, even if they had influenced our thinking.
Six years ago, I bought a resale Housing and Development Board (HDB) flat because I was worried about stretching my finances too thin, despite my property agent advising that the resale condominium across the street was a much better deal.
Six years on, I'm watching the owners of the condo unit across the street walk away with a S$400,000 gain, while my HDB flat has barely appreciated in value.
Despite my regrets, I'm in no position to blame my agent. Ultimately, I made the call for myself.
It can be a hard pill to swallow, but what we choose to do with our money is up to us – not that influencer with the slick Instagram feed, or the financial adviser pushing you to buy a policy by month's end, and definitely not the strangers in Telegram groups hyping up the next 'sure win' investment.
So the next time you see a viral TikTok about a "sure-win" investment, remember this: Not all financial advice is bad, but not all financial advice is meant for you.
Don't just ask yourself 'Is this good?' Ask yourself: 'Is this good for me?'
We must stay curious, choose wisely and never outsource our personal financial responsibility to anyone else.
